Can you make optimal use of the work-related costs scheme in 2017?

There are opportunities to make optimum use of the free space within the Work Costs Regulation (WKR) this year. We have listed a number of tips for you.



Within the WKR, you can spend a maximum of 1.2% of your total taxable wages on untaxed payments and benefits for your employees or yourself as director-major shareholder (DGA): the free space . You pay wage tax and national insurance contributions in the form of a final levy of 80% on the amount that is paid out to your employees in excess of this free space.

The WKR offers a lot of freedoms with regard to the allowances and benefits to the staff.


However, the WKR has an important limitation, the regularity test . This means that the allowances and benefits (which fall into the free space or the final pay) may not deviate by more than 30% from what is customary in similar circumstances (eg a duration, gold watch for a temporary employee with minimum wage is in principle not usual).

Bonuses can also be designated as a final wage for the free space. Reimbursements or benefits of up to € 2,400 per employee per calendar year are considered by the Tax Authorities to be customary. The 30% deviation does not apply to this amount. In addition to a general cost reimbursement of € 2,400 per year, you may also grant specific customary expense reimbursements or benefits.

Example company X


Total tax payroll in 2017

€ 150,000


To use free space in 2017 (1.2%)

€ 1,800


Total allowances and benefits in 2017

€ 600

(costs including VAT)

Remaining free space in 2017

€ 1,200


Company X can still pay € 1,200 in compensation and benefits to its employees without having to pay final tax.

If company X decides to pay € 2,200 in allowances and benefits to its employees in the remaining month, then company X will spend € 1,000 above the free space. Over this multiple of € 1,000 80% final tax (€ 800) must be paid. Incidentally, a final tax of 80% is often more advantageous than the employee receives the wage net and the employer grosses it.

Use the targeted exemptions and nil valuations to compensate, provide or make available certain items untaxed. The allowances and benefits in these categories do not affect the free space. Examples include the kilometer allowance (€ 0.19 per km), work clothes, telephone costs and study costs.

The remaining free space can only be used in 2017. Moving the free space to 2018 is not possible. You can use the remaining free space in various ways (the usual test also applies here):

  • a higher mileage allowance than € 0.19 per km is not covered by the specific exemption, but must be included in the free space
  • pay bonus to employee (eg Christmas bonus). Employers can pay an untaxed bonus to employees, including the DGA
  • end of year / Christmas dinner or drinks
  • Christmas package
  • bicycle of the case

If your free space has already been fully utilized and you still want to give your employees a Christmas package, think of the New Year’s package. You give this package to your employees in early 2018. As a result, this provision does not fall within the WKR of 2017 (no final levy of 80%).